Vistara’s net loss narrowed down to ₹1,393 crore in FY23 from ₹2,031 crore in the previous year with revenue doubling to ₹11,784 crore, from ₹5,226 crore for the period. However, its net worth dipped by half to ₹501 crore from ₹1,249 crore last year. The airline hired over 2,100 employees in the reporting fiscal.
The company’s expenses soared to ₹13,890.7 crore, doubling from ₹7,551 crore in FY22, it said in a regulatory filing with the Ministry of Corporate Affairs.
CEO renumeration
During the board meeting to discuss the audited financial statements of the company for the financial year ended March 31, 2023, a special business listed was to “increase remuneration” of Vinod Kannan, CEO of the airline.
“The Board of Directors at its meeting held on May 04, 2023 and June 06, 2023 pursuant to the recommendation of the NRC and subject to the approval of the shareholders, approved the recommendation to ratify the increase of the reimbursement of the remuneration of Mr Kannan for the financial year 2022-23 up to S$812,000 and also seek the approval of the reimbursement for the rest of the term which shall not exceed S$2,000,000 per annum,” the regulatory filing mentioned.
Besides, the company informed its stakeholders about the potential merger between Air India and Vistara. The merger is subject to regulatory approvals.
It also said that the airline has entered into a related party transaction for sub-leasing of aircraft with Air India Express -the regional low-cost carrier now owned by the Tata Group.
The full-service carrier stated that during a board meeting held on November 11, 2023, it entered into a sublease agreement. “The sublease proposal has been finalised as a tripartite agreement between the lessor, sub-lessor (Vistara) and sub-lessee (Air India Express). The tripartite sublease agreement is a back-to-back agreement, that is it mirrors the main lease agreement between company (Vistara) and the lessor,” it said.
The tenure is for four years, and through this sublease, Vistara “will be charging Air India Express a mark-up of up to 4 per cent on the rentals as admin costs.”
Bounce-back
Giving an industry outlook, the Tata-owned airline said, the Indian aviation industry bounced back strongly in FY23 surpassing pre-Covid levels. Domestic demand surged past pre-Covid levels to register more than 400,000 passengers every day consistently for the last six months. “Direct non-stop operations from India to Europe and the US are expected to grow further in 2023. India expects to post double-digit growth in both fleet and traffic to consolidate its position as the world’s third-biggest aviation market.”
It further added that the International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023 as carriers continue to cut losses stemming from the effects of the Covid-19 pandemic to their business in 2022. Despite the economic uncertainties as a result of rate hikes and geopolitical issues, there are certain tailwinds due to lower oil price and expectation of lower inflation coupled with strong travel demand.